(dissenting).
I respectfully urge the Members of this Honorable Court, who joined in the majority opinion on rehearing, to reopen their minds, re-examine the evidence, take into consideration the interested parties to the agreement, and look to the character of the business itself. They would arrive anew at a decision prompted by full re-examination of the case on all of the facts and ap*638plicable law, and I feel that they would reach a different conclusion. When all of the facts are seen and the respective positions of the parties made manifest, the obscuring fallacies must of necessity fall apart.
The majority opinion on rehearing holds that the defendant was not acting in a fiduciary capacity when he mis-appropriated the funds of his principal, because no technical or express trust relationship existed between the Local Agent and the General Agent. The writer of the opinion relies strongly on the case of Crawford v. Burke, 195 U.S. 176, 49 L.Ed. 147, 25 S.Ct. 9. That case involved a transaction between client and broker, and I do not think it is pertinent to the issues here.
The parties to the transactions in the instant case are the assured, the local agent, the general agent, and the Insurance Company itself. They all have a mutuality of interest. Recognizing such a fact, the State of Louisiana has an insurance code by which the insurance business is regulated under the police powers of the State.
LSA-R.S. 22:2 declares that:
“Insurance is a business affected by the public interest and it is the purpose of this Code to regulate that business in all its phases.”
Only the General Agent complied with the law of the State of Louisiana. The Local Agent did not so comply, and to engage in this business of trust he had to obtain the underwriting facilities 'of the General Agent. The very' opening line's of their contract provides:
“In consideration of the General Agent's making its underzvriting facilities available to the Local Agent, and in consideration of the other 'mutual covenants, stipulations and agreements hereinafter set forth, the parties hereto agree as follows:” (Italics ours.)
The Local Agent (in conformity with the annexed schedule of the contract) solicited policies of insurance, which hád to be approved by the General Agent. He then delivered the policies to the assured and collected the premiums which the policyholders paid for protection. The Local Agent was allowed to retain 10 to 25% of the premiums collected, dependent on thé nature and character of the policies. He held the balance of 75 to 90% in trust to be turned over to the General Agent, who in, turn remitted to the Home Office the agreed proportion. The payment of premiums is-as necessary for an insurance business to be a going concern as gasoline is necessary to run an automobile.
The majority opinion on rehearing cites-the case of Upshur v. Briscoe, 138 U.S. 365, 11 S.Ct. 313, 34 L.Ed. 931. In that case, the defendant held funds as a loan. One who-borrows money must pay back what he borrows, but the loan funds may be invested and employed at his pleasure.
The factual situation in the instant case is easily distinguished from that set forth: *640in Upshur, supra. The premiums collected by the Local Agent were not loaned to him by the General Agent, and, therefore, no debtor-creditor relationship existed between them. The collection of the premiums constituted a sacred trust. When one collects money in a fiduciary capacity, as the Local Agent did in this case, he is not permitted to spend the money as he chooses.
In our original opinion we quoted the case of Citizens Mutual Automobile Insurance Co. v. Gardner, 315 Mich. 689, 24 N.W.2d 410, in which the facts were identical to the ones here. The State of Michigan had a statute which provided that an agent was acting in a fiduciary capacity when collecting insurance premiums, but this statute was merely declaratory of that existing relationship.
In the suit of State v. United States Steel Co., 1953, 12 N.J. 51, 95 A.2d 740, 744, the Court said:
“The true test of the relationship arises from the nature of the transaction itself and the intent of the parties involved.
“ ‘The issue of trust or no trust turns almost invariably on proof of intention since the trust arises upon mere expression of the requisite intention.’ Eagles Bldg. & Loan Ass’n v. Fiducia, 135 N.J.Eq. 7, 37 A.2d 116, 118 (Ch. 1944).”
The case of American Surety Co. of New York v. Greenwald, 223 Minn. 37, 25 N.W.2d 681, 685, is pertinent to the instant case. There the Court said:
“ * * * There are various statements in bankruptcy treatises and in many decided cases to1 the effect that to constitute ‘fiduciary capacity’ within the meaning of subd. a(4) of § 17 there must be a technical or expressed trust relationship. It appears to us that the facts in the instant case establish such a technical or expressed trust relationship as to make the position of defendant a fiduciary one within the meaning of subd. a(4) of § 17. In holding that the arrangement existing between defendant and Travelers at the time of the transactions in question constitutes a trust arrangement, we are not achieving that result by ignoring the established principles of the law of trusts. The facts here present well establish that defendant received and collected the premiums under and pursuant to clear and definite terms set forth in the written instrument presented to him by Travelers. That instrument specifically prescribes, as to defendant, that after receiving ‘the gross premium from the state, you will in turn deduct your total commission as agreed upon in this letter and that you witt then remit the balance to us.’ Thus, defendant received and collected the money as a trustee under an express trust. Bearing upon the question before us is the following from Re*642statement, Trusts, § 12, comment g, which is peculiarly applicable to the facts of the case at bar:
* * * * * *
“That the arrangement here existing between Travelers and defendant constituted an express trust would seem clear under the decisions of this court, illustrative of which is Wertin v. Wertin, 217 Minn. 51, 54, 13 N.W.2d 749, 751, 151 A.L.R. 1302, where this court said: ‘ “Express trusts are those which are created by the direct and positive acts of the parties, by some writing, or deed, or will; or by words either expressly or impliedly evincing an intention to create a trust.” 65 C.J., Trusts, pp. 220, 221, [§ 10] B. In our cases we have defined such trust to be “one created by the parties in language directly and expressly pointing out the persons, property, and purposes of the trust.” 6 Dunnell, Dig. & Supp. § 9877, and cases in note 95; In re Estate of Burton, 206 Minn. 516, 289 N.W. 66.
Another point urged in the majority opinion on rehearing is that the word “trust” is not used in the agreement. In the suit of State v. United States Steel Co., supra, the Court held that to constitute a trust it is not necessary that the word “trust” be used.
The third point urged is that the premiums collected by the Local Agent were not segregated. Again, in State v. United States Steel Co., supra, the Court said:
“ * * * the * * * facts here, show no segregation of the withholdings. But segregation of funds is only one of many factors to be weighed and considered in ascertaining the true intent of the parties. Failure to segregate the funds is not determinative of the conclusion that the relationship was debtor and creditor. The intermingling of funds in itself does not destroy a trust otherwise evidenced by the intent of the parties.”
I respectfully dissent.